Talking Points
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Foreign Exchange Price & Time at a Glance:
Price & Time Analysis: USD/JPY
ChartPrepared by Kristian Kerr
- USD/JPY continues to consolidate above the 50% retracement of the May – June advance at 122.40
- Our near-term trend bias is lower in the exchange rate while below 124.40
- Weakness under 122.40 is needed to set off a more important move lower in USD/JPY
- Minor turn windows are seen today and Wednesday
- A close over 124.40 would turn us positive on the exchange rate
USD/JPY Strategy: Like the short side while below 124.40.
| Instrument | Support 2 | Support 1 | Spot | Resistance 1 | Resistance 2 |
|---|---|---|---|---|---|
| USD/JPY | 121.70 | *122.40 | 123.30 | 123.55 | *124.40 |
Price & Time Analysis: GBP/USD
ChartPrepared by Kristian Kerr
- GBP/USD traded at a new 7-month high last week before stalling out near the 50% retracement of the 2014 high and this year’s low
- Our near-term trend bias is higher in Cable while above 1.5675
- A close over 1.5875 is needed to expose a Fibonacci/Gann cluster between 1.5990 and 1.6020
- A minor turn window is seen around the middle of the week
- A daily close below 1.5675 would turn us negative on the pound
GBP/USD Strategy: Like the long side while over 1.5675
| Instrument | Support 2 | Support 1 | Spot | Resistance 1 | Resistance 2 |
|---|---|---|---|---|---|
| GBP/USD | *1.5675 | 1.5830 | 1.5910 | *1.5875 | 1.5990 |
Focus Chart of the Day: EUR/USD
EUR/USD recorded a new month-to-date high late last weekand actually came within a few pips of testing the quarter-to-date closing high at 1.1442 before stalling out. Is the euro undergoing a double top backtest before turning lower or is it about to break out and extend the multi-month advance? The next 24-28 hours should prove key in determining which path the euro will take as near-term cyclical analysis suggests we have reached an inflection point of sorts. If the broader downtrend is going to re-assert itself here then EUR/USD shouldn’t really rally past last week’s 1.1435 high. Traction above this level would be a strong sign that multi-month correction in the single currency is nowhere near finished. A failure, on the other hand, at or around current levels followed by a break of median-line channel support at 1.1230 over the next few sessions would confirm a change in behavior and re-focus attention lower in the single currency.
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--- Written by Kristian Kerr, Senior Currency Strategist for DailyFX.com
This publication attempts to further explore the concept that mass movements of human psychology, as represented by the financial markets, are subject to the mathematical laws of nature and through the use of various geometric, arithmetic, statistical and cyclical techniques a better understanding of markets and their corresponding movements can be achieved.
To contact Kristian, e-mail instructor@dailyfx.com. Follow me on Twitter @KKerrFX
